Archive for the ‘B2b Reverse Auction’ Category

You should consider Lifecycle Costing when calculating savings on new business awards.

Tuesday, February 21st, 2023

Today is a re-post from a long long time ago. What’s changed you ask? NOT MUCH!

It’s true that a reverse auction can create substantial low quote savings. However, much needs to be considered when tracking realized savings once the event has concluded and the award of business is ready to be made.

Lifecycle Costing is a procurement technique which considers operating, maintenance, acquisition price, and other costs of ownership in the award of contracts to ensure that the items or services to be acquired will result in the lowest total cost of ownership during the time the item’s function is required.

If a category is truly returning event savings, it should be able to be tracked from original delivery to contract termination on a companies detailed P&L. The trick is that many of the associated costs go to different departments on the P&L. If you don’t know which ones, your pre-event discovery was not complete and the odds of getting the actual savings reported are at significant risk.

So, give us a call.  And ask us about our e-Procurement solutions and associated white glove services and our SafeSourceIt™ Global Supplier Database  that includes over 557,000 vendor/suppliers. We can get you better pricing on about any category of product or service.

Communicating the Good eAuction News

Wednesday, February 9th, 2022


An Oldie but goody from our SafeSourcing Archives

While the answer is probably not going to be “I’m going to Disneyland,” the answer from some of the biggest companies in the world, actually because they are the biggest companies in the world, is more surprising than you think.

Companies invest hundreds of hours gathering specifications and employing 3rd party partners to hold RFIs, RFPs, RFQs, and reverse auctions so that, at the end of the day, they can be assured of reducing their costs on the items that they purchase.

Unfortunately, great prices are only good if the rest of the company knows that they should all be ordering from the vendor that guaranteed and was contracted to deliver those low prices.

By not doing so, your company can actually lose money twice; once for the lost savings you could have received but didn’t because the company ordered from other, more expensive companies, and twice because many of these great deals are made on the premise that a certain volume of purchases will be made from that supplier.  If that level is not met, worst case scenario is that there will be financial penalties associated with the lack of activity, but you are at least looking at a situation where that vendor will not offer those same discounts again.

Communicating this information is not as difficult of a task as it may seem, so make sure you have a channel for everyone to go to that will let them know what items are affected by these contracts and who they should be purchasing the items from.

Many times, a company will have an intranet that can be used for this purpose.  In other cases, you may choose to employ a third party to host this information securely for your company.  If the latter is of interest to you, contact a SafeSourcing Customer Service representative today to speak about the options available to you in this area.


Communicating openly with suppliers is a key to high quality e-procurement events.

Thursday, April 2nd, 2015


Todays post is by Ronald D. Southard, CEO at SafeSourcing Inc.

We?ve all known for a while that our seat partners look over our shoulders to see who we are and what we do. I told him I was reading an Aberdeen business brief and who and what they do. I went on to explain that our company was focused on the use of ?e-procurement tools for?or customers. He introduced himself as a private business owner with his two brothers and that he had experience biding in reverse auctions with these tools.

We discussed SafeSourcing?s offerings and ultimately came around to what made e-procurement events successful for his company in the past as a prospective supplier and what would encourage them to participate again even if they did not happen to be awarded the business in a particular event. His take was that this was initially an educational process for their company and ultimately would become a way to do old things in a new way. He also suggested the following

1.?Openly communicate with prospective suppliers
2.?Make sure they understand everything and comfortable
3.?Make sure they have no open questions.

With that as an understanding I offer the following list of sample questions one might consider when inviting a supplier as a new participant.

1.?Does the supplier understand that there is no cost to them to participate?
2.?Do they understand they will be trained at know charge?
3.?Do they understand event timing and requirements?
4.?Does the supplier understand the terms being used and how they apply to an e-procurement event such as? In fact, do they understand what a reverse or forward auction is?
a.?Reserve Price
b.?Proxy Volumes
c.?Low Quote
d.?Proxy quote
i.?Matching quotes
j.?Event? rules
k.?Product specifications
m.?Award of business

At the heart of it, it comes down to something we all know but don?t always practice and as such negatively impacts the sustainability of processes that just make good sense. And that is that the supplier is your customer too and the customer comes first and should be treated the way you would like to be treated.

If you’d like to learn more about?SafeSourcing’s ?quality approach to supplier management during the eProcurement process?and why our satisfaction rating is 99.999% with our vendor participants, please contact a SafeSourcing Project Manager

We look forward to and appreciate your? comments.

Will a Reverse Auction always result in savings?

Thursday, March 12th, 2015


Todays post is from our archives by Ronald D. Southard, CEO at SafeSourcing Inc.

To the above point, this author has never seen a single category or product that can not be sourced using a reverse auction. And, I know many will argue this point with me. My answer however is a little more complex and is based on the evolution of original reverse auction or e-negotiation tools. As these tools have evolved, so have the processes associated with them whereby today’s tools have many features that support the entire RFI to RFP process within the same toolset resulting in a final compression event of reverse auction?

The process is really what determines the success of your e-negotiation event and that includes the determination of what it is you are looking to measure. Simply indicating that you want to reduce last year’s price or the price from your last contract is not always a fair analysis. Markets fluctuate daily and a year after your original contract, markets that drive the product you are sourcing may not be favorable to reducing your current price. However utilization of these tools may be able to help you reduce prices you might have to pay while prices are rising or put another way help you avoid costs. Cost avoidance is a good thing, particularly if your competition is not doing the same thing.

In many cases, if your contracts are not current and you have not used these types of tools to negotiate your current pricing and you do not know where to find alternative sources of supply; you will most likely see savings during the first year. After that the category and commodity driving it will determine further compression, holding prices constant or cost avoidance. All are a benefit of todays best of breed e-negotiation tools.

If you’d like to learn more as to how SafeSourcing can reduce your cost of goods, capital budget or expenses, please contact a SafeSourcing Project Manager.

We look forward to and appreciate your comments.

So, just what is a retail market exchange?

Thursday, August 14th, 2014

Todays post is by Ronald D. Southard, CEO at SafeSourcing Inc.

Quite honestly this is a fairly complex question so the answer is not simple. To begin with let’s take a look at just what a market (retail) exchange is.

One of the earliest exchanges in the retail space was called the Retail Exchange which was sponsored by some very large retailers and is still available today from a company that bought the system from its retailer sponsors. As simply as possible, a  Market (Retail) Exchange  is a business to business or B2B E-commerce platform that allows Suppliers, Resellers, and their customers or buyers to offer, purchase and manage their goods and services in a simple and effective way. Typically an organization must be a member of the exchange in order to participate. Once a member the organization can then conduct business with other organizations by establishing on line connections with each other. Typically exchanges are a shared hosting environment and in some cases for very large companies dedicated server implementations. In recent years exchanges have migrated to SaaS or software as a service models in order to address wider markets.

The success of an exchange is based on the number of suppliers or resellers that belong to it and their willingness to participate with a retailer for their business. The activity is more of hands off approach once your offer is posted that can include punch outs to a supplier’s website and catalog services for sourcing of products.

From my perspective I like the personal touch of the historical RFX process in the form of a SaaS full service offering that actively engages new sources of supply and sells them on wanting your business.  There is a much smaller investment from both a financial and resource perspective. If you want to learn more about the RFX process please visit SafeSourcing Blog archive or the SafeSourcing Wiki.

If you’d like to learn more about how SafeSourcing can assist you in the complex world of eProcurement, please contact a Safesourcing Customer Services Account Manager.

We look forward to and appreciate your comments.

E-Procurement at ProcureCon Canada 2014: Capturing Money Left On The Table!

Tuesday, April 1st, 2014

Todays post is provided?courtesy of?Mr. Eugene Duynstee, President of KPM Enterprises Inc.

The following content was presented by: Eugene Duynstee, President of KPM Enterprises Inc. and Ron Southard, CEO of SafeSourcing Inc. at the ProcureCon Canada Conference 2014 which was attended by a number of Canada?s Senior Procurement Professionals

All too frequently procurement professionals faced with negotiation with incumbent suppliers are being told:

?? ?? We always give you our best price
?? ?? Our products/ services are unique ? no one else can do what we do
?? ?? No one else knows your business as well as we do and would look after you the way we do

If you sense these are not true, you would be right. The result?? ?Money is left on the table?.

The dilemma: You? have a lot on your plate, and there is often pressure from above to just ?stick with the incumbent?, but your responsibility is to garner the best cost for the required quality and service, so what do you do?????

Take the easy path, or the right path? How do you capture?? the ?money left on the table??

The answer: You need to find a way to dramatically improve the efficiency and effectiveness of your buying process. This is what will lead to success:

?? ?? Consider more vendors: double the number of eager vendors wanting your business
?? ?? Develop a more efficient RFP process:? process 3-5 X the # of RFP?s in the same amount of time.
?? ?? Level the playing field for vendors competing for your business: don?t allow one vendor to have undue influence
?? ?? Expand the scope of information: provides you with a better assessment based on quality and service, as well as price.
?? ?? Conduct an e-auction: this has been proven to establish the best price from vendors

Where do you find this? All the e-procurement tools necessary to realize this innovative buying process are currently in use, and are readily available and supported by a capable and experienced procurement partner.

What makes e-procurement easy to use?

?? ?? The process is structured and automated
?? ?? It provides instant access to extensive pool of supplier and product information
?? ?? It does not require your IT group
?? ?? It is led by a partner that does 80% of the work

What does an eProcurement partner provide to you?

?? ?? Detailed, comprehensive specifications
?? ?? Extensive vendor data base
?? ?? Easy to use, flexible software
?? ?? Remote access (cloud based)
?? ?? Vendor training
?? ?? In-depth category expertise
?? ?? And importantly, a no risk trial to get you started and comfortable

What results can you expect?

?? ?? Save an additional 15-25% on your costs
?? ?? Deliver an ROI 10 ? 15X the investment
?? ?? Increase your impact on the business
?? ?? And most importantly, the ?money left on the table? is captured!

If you’d like to learn more about how easy it can be to capture money that you ARE leaving on the table, please contact a SafeSourcing Customer Services Representative.

We look forward to and appreciate your comments!


Why is the Unloading Category a Great Choice When Executing an eProcurement Event?

Tuesday, December 10th, 2013

Today?s post is by Ryan Melowic; Assistant Vice President of COE at SafeSourcing.

Many companies use third-party unloading services to eliminate the risks and costs of internal employees. These companies should work to thoroughly understand this category because there are tremendous opportunities for savings in it. Please let SafeSourcing explain.

The unloading services category is complex and requires a keen understanding of all the moving parts. In addition, there?re different load types, different units of measure and additional fees and they must all be broken down to properly take this category to market. For large companies, the level of breakdown that is needed is a daunting task.

When executing an eProcurement RFX for unloading services, gathering the pricing is the less complex part. Comparing the different pricing models for each vendor is the complex part. With SafeSourcing as your partner, your company can rely on us to do the heavy lifting of this category for you. Our experts have the experience needed to conduct a thorough analysis of your current unloading services category. SafeSourcing will then go to market and provide the analysis needed to show your company what options to choose to save the most money.

SafeSourcing has seen savings in this category hit the double digits numerous times this year. When looking at the amount of money that is typically spent in this category the savings dollars are large.

For more information on how SafeSourcing can help you with your unloading Services l procurement needs or on our ?Risk Free? trial program, please contact a SafeSourcing Customer Service Representative.
We look forward to your comments.

You might think that suppliers understand that a reverse auction is a great opportunity for new business.

Friday, November 15th, 2013

The easiest way to do this it to keep the communication open friendly and non adversarial. At SafeSourcing we have a training class for this that we have with our customers and for all new associates as the join our company.
A friend of mine that is a manufacturer said it this way. ?Openly communicate with our supplier?s because their relationships are important to us. Make sure they understand everything and are comfortable with it. Make sure they have no lingering questions.

Here although not all inclusive is a list of sample questions one might consider when inviting a supplier as a new participant.

1.?Does the supplier understand that there is no cost to them to participate?
2.?Do they understand they will be trained at know charge?
3.?Do they understand event timing and requirements?
4.?Does the supplier understand the terms being used and how they apply to a reverse auction event such as?
a.?Reserve Price
b.?Low Quote Indicator
c.?Max quote
e.?Terms & Conditions
h.?Matching quotes
i.?Event? rules
j.?Product specifications
l.?Award of business
m.?Letter of Intent
n.?This is an opportunity for new business
o.?Event communication strategies

At the heart of it, it comes down to something we all know but don?t always practice and as such negatively impacts the sustainability of processes that just make good sense. That would be open clearly articulated communications.

If you’d like to know why SafeSourcing has a customer satisfaction rating greater than 99%, please contact a SafeSourcing customer services account manager

We look forward to and appreciate your comments.

Conduct your sourcing as a market basket or product alone and you’ll leave value on the table.

Thursday, August 1st, 2013

Market basket sourcing has been around for a long time. Most of us are familiar with a market basket as something we see or use in a supermarket. Every market basket is made up of different items and different quantities of items based on the needs or desires of the individual consumer. The majority of the mix is based on use both planned and historical. In today’s age of big data, the relationships of these items one to another or their affinity is also important although not necessarily well understood. An example would be why someone buying baby diapers might also be buying beer and chips and how that may influence sourcing decisions.

As such it is the uniqueness of these individual market baskets that should concern business owners when they develop their sourcing strategy. This applies as much at an individual shopper level for a retailer as it does at the business to business level.

Understanding the unique characteristics of products and their relationship to other products is key to understanding how to source those products. Just as retailers look at the their top deciles of customers and try to figure out how to get better wallet share from these groups by understanding the mix of the products they buy; businesses can look at the top deciles of the goods and services they buy to conduct their business and figure out how to get a better price for the items the sell or use most frequently. A market basket approach to sourcing where everything is lumped together will never accomplish the compression goals set in a companies sourcing strategy.

Sourcing based on the top deciles within a particular product category on an item by item basis not only drives the best possible compression, it also creates data relative to products and services where incumbents or awarded suppliers are not competitive. This data is extremely useful in setting next cycle strategies. It is also important as to your supplier strategy in terms of who to invite to participate, such as specialty suppliers within certain deciles of spend.

Sourcing using market baskets combined with sourcing based on deciles as well as units will achieve the best overall results over time. To learn more contact a SafeSourcing representative and ask them about SSDBS™.

We look forward to and appreciate your comments.

Twenty-one steps to running high quality Retail e-procurement events and reverse auctions.

Thursday, May 23rd, 2013

Todays post is from Ron Southard, CEO at SafeSourcing!

At any rate and regardless of the specific naming convention used there are certain rules which when followed will create higher quality e-procurement events for the Retailer as well as the Supplier?

Following these steps will result in maximizing savings or cost avoidance regardless of market conditions!

The importance of focusing on a clear process will also increase event participation at the supplier level. As a result of paying attention to quality and detail your existing trading partners and potential new sources of supply will respect your process and it will keep them coming back in the future to compete for your business again.

1. Executive sponsorship is mandatory from the C- Suite.
2. Get the entire buying organization together for a kickoff and discovery session.
3. Provide an over view of what you are going to be doing and the impact it can have on the company. Use company financial models.
4. Discuss and agree on success criteria.
5. Every event will not be a homerun. Singles and doubles score runs.
6. Create a fun environment.
7. Consider prizes for the most creative use of the tolls by functional business area.
8. Use scorecards by department with percent of savings.
9. Discuss the meaning and importance of corporate aggregation.
10. Hand out event templates to gather existing product specifications.
11. Put a time requirement on data collection.
12. Gather an accurate list of your present suppliers.
13. Work with your sourcing solution provider to identify a top 100 list of opportunities.
14. Develop a Calendar the events.
15. Prioritize by dollar value, date and strategic value.
16. Conduct department level detailed discovery meetings of 30 minutes to an hour.
17. Investigate existing contract language.
18. Look for auto renewal (evergreen) language roadblocks.
19. Determine alternate sources of supply with your sourcing solutions provider company.
20. Develop an event rules and instruction template and post with each event.
21. Develop a category and event based strategy

Although these steps are not all encompassing, they provide a format for getting started that offers the best opportunity for reduction in cost of goods, expenses and improvement in corporate earnings. Be sure to combine this with a business partner that knows your business.

If you’d like help building your strategy, please contact SafeSourcing.
We look forward to and appreciate your comments.